Ex-Cendant Executive Ordered Confined at Home

Published: December 7, 2006

A federal judge on Wednesday ordered home confinement for E. Kirk Shelton, a former Cendant Corporation executive, while he appeals his convictions in a $3 billion accounting scandal at the travel and real estate company.

Mr. Shelton, the former vice chairman of Cendant, was sentenced last year to 10 years in prison on conspiracy and fraud charges. He was also ordered to pay $3.27 billion restitution to Cendant, including a balloon payment of $15 million and monthly installments of $2,000 after he is released from prison.

Mr. Shelton had been free on bond with some travel restrictions pending appeals of his convictions, which were upheld last month by the United States Court of Appeals for the Second Circuit in New York. His lawyers intend to ask the court to reconsider its decision.

Judge Alvin W. Thompson of Federal District Court imposed house arrest on Mr. Shelton with some exceptions, including visits to see his lawyers and psychiatrist in Connecticut and New York. Mr. Shelton will be subject to voice verification calls to make sure he is at his home in Darien, Conn., and must report to probation officials once a week.

Mr. Shelton declined to comment.

Prosecutors said he inflated revenue by $500 million at Cendant's predecessor, CUC International, based in Stamford, Conn., to drive up the stock price. The fraud was reported in 1998, causing Cendant's market value to drop by $14 billion in one day.

The former chairman, Walter A. Forbes, was convicted in October of fraud conspiracy and other crimes in connection with the accounting scandal and awaits sentencing.

Cendant, based in New York, was renamed the Avis Budget Group in September to reflect its Avis and Budget vehicle rental brands. Cendant's real estate and hotel businesses were spun off as stand-alone companies and the company sold its travel distribution operations.

Judge Thompson had ordered Mr. Shelton to report to prison in September 2005, but the appeals court suspended that ruling while it considered his appeal.